The search for your new home is an exciting endeavor but is also a long and arduous ordeal. Once the deal has been negotiated and accepted, it is time to choose a closing date. Do not choose a date casually. Choosing the right date can ensure a smooth closing and help reduce your closing costs. Choosing the wrong date puts you at risk of not closing on time, needlessly complicating your move and even losing your new home.

When choosing a date, keep these things in mind:

What is a Closing Date?

The closing date is the date that the seller agrees to transfer ownership of the home to the buyer. Your closing date is typically several weeks after a purchase agreement has been executed, but can vary depending on the method your buyer chooses to finance the home purchase. For example, cash buyers typically close a lot more quickly than buyers who require a mortgage.

Closing dates can be flexible, depending on the parties involved and the required timeline. It is not unusual for a closing date to change, especially if the buyer is financing their purchase, as their loan process must be finalized and all funds in place before closing is possible.


Can You Choose Your Closing Date?

You will be able to choose your closing date. However, all parties must agree to the proposed date. If you do not adhere to the agreed closing date, as the seller you could be held in breach of contract by the buyer.

It is also prudent to note that if the buyer is working with a lender, their mortgage rate can changes if closing doesn’t go as scheduled. So it is in all parties interests to stick to the agreed closing date.


How Long Does a Closing Take?

Closings typically take 30 to 45 days after the offer is accepted. The process can take longer depending on the inspection period length and the outcome of the appraisal.

You can ensure that your closing is as speedy as possible by handling all negotiations through your real estate agent. As experienced professionals, most real estate agents have overseen many real estate transactions and understand how to streamline the process to make sure that it is as quick and efficient as possible.

  • How long does it take to close on a house with cash?

Part of what makes closings take so long is the financing requirements, so buying with cash can expedite the process. If you’re buying with cash, you can close as few as seven days after contract execution, assuming you’re willing to waive contingencies. However, only 23% of buyers purchase their homes with all cash.

  •  How long does it take to close on a house with a mortgage?

Buyers who use conventional financing to purchase a home can expect to close 30-45 days after the contract is signed. Special loans, such as first-time home buyer programs, VA and FHA loans can take longer to close because the requirements are stricter.


Tips for Choosing the Right Closing Date

1. Give Your Lender Enough Time

Unless you are paying cash for the home, you will need to keep yourself, the seller and your mortgage lender in mind when choosing the closing date. Most people schedule the closing date for 30-to-45 days after the offer has been accepted.

Keep in mind that mortgage lending is a labor-intensive process that requires the various players to coordinate many different steps. Under the best of circumstances, it is a time-consuming effort. So include plenty of time to account for unexpected delays.

If you do not allow enough time, the closing date might arrive before your financing is approved. If that happens, the seller might be able to cancel the deal in favor of a more attractive offer. Although most sellers will agree to a new date, it is a risk you probably do not want to take.

On the other hand, it is important that the closing occur before the lender’s loan commitment expires so you can enjoy the promised interest rate. If the date occurs too late, you might have to negotiate a new rate – or even the entire loan package.


2. Give Yourself Enough Time

You will need enough time to complete the closing process. If you have a deadline, such as the end of a lease or movers arriving, be sure to set your closing date for at least two weeks before that deadline. Sometimes lender approval can be delayed, causing the need for both the buyer and seller to agree to a new closing date, so you want to create some wiggle room just in case.

Make sure the closing date is set so that you have enough time to lock in your interest rate. Lenders will typically lock your approved interest rate for 30 to 60 days, but be sure you are clear on exactly how long your rate is good for, and that your closing falls within that window. You can sometimes extend a lock on a mortgage rate, but typically that requires a fee.


3. Understand That Some Days Are Better

Certain closing dates are more advantageous because of how your first mortgage payments are calculated. In most cases, it is best to close at the end of the month because your first mortgage payment is due on the first day of the second month after you close.

Unlike your rent, mortgage payments are paid in “arrears,” meaning you pay that month’s payment at the end of the month, not the beginning.

You do not pay the mortgage for the month when you close; however, you do pay interest, because interest starts accruing on the day you close. So closing toward the end of the month could save you several hundred dollars in interest payments.

Avoid closing on Friday. While Fridays are popular closing dates, you should avoid them if possible. Many purchasers prefer to move in over the weekend, so closing on a Friday makes sense but is also typically busy for both title companies and lenders, making delays more likely. Plus, if something goes wrong on a Friday and settlement must be pushed, it will have to be rescheduled for a Monday, three days later. Thursdays are typically not nearly as busy, so both the title company and the lender can give your closing more attention and time. Also, if something goes wrong, the closing can be pushed to Friday, only one day later.

Also, avoid closing on a holiday or right before a holiday. This sounds silly, but there are a lot of smaller holidays which are peculiar to states or even municipalities. It never hurts to consult the calendar.


4. Watch Out for Delays

As you go through the closing process, understand most of the time things go very smoothly toward an on-time closing date. However, there can be some delays to watch out for, including:

  • Problems with the appraisal/the appraisal is too low
  • Issues with insurance/the home is not insurable
  • Issues with title/not a clear title
  • Home inspection reveals defects or major issues

Most delays in closing are resolvable, but they can create hiccups in the schedule and take a little extra time.

Ultimately, choosing the right closing date means taking into account your unique situation, any deadlines you have, any considerations about the home itself or the loan, and aiming for a time that is to your advantage financially by costing you the least amount of interest payment. Every loan and every sale is different, and a skilled mortgage professional and realtor can help you determine the best timeline.


5. Review Your Finances

Mortgage payments are almost always due on the first day of the month and the payment you make is for the preceding month. So, if you close in July, your first payment is due on the 1st of September. You will have to pay interest for the month of July from the date of closing. If you close early in the month, say on the 10th, you would have to pay for 21 days, while if you closed on the 25th, you would have to pay six days’ worth of interest. If money is tight, then closing toward the end of the month will reduce your out-of-pocket expense.


6. Tax Advantages to Consider When Choosing a Closing Date

In some cases, you may want to consider postponing your closing until the following tax year. You should review your tax liabilities for the current tax year and ask your financial adviser or accountant whether taking additional deductions in the current or future year would be most beneficial to you.

You may not be able to postpone your closing, but it might be worthwhile asking to see if the benefit would be substantial. Your accountant can calculate the items at closing that will be tax-deductible and those that will be added to the value of the property. The normal allowable home purchase deductions will be the points, interest and property taxes.


What Happens at Citrus Heritage Escrow?

Your escrow officer follows instructions on your contract, coordinates deadlines, and gathers all necessary paperwork. For example, written requests for payoff information (called “demands”) are sent to the Seller’s mortgage company and any other lien holders.

During the escrow period, the title company coordinates with Citrus Heritage Escrow and begins researching and examining all historical records pertaining to the subject property. Barring any unusual circumstances, a commitment for title insurance is issued, indicating a clear title or listing any items which must be cleared prior to closing. The commitment is sent to you for review.

When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.

Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200